TIMES ONLINE: Shares across the UK, America and Europe tumbled today after it emerged that the US economy shrank at the fastest rate since 1982 in the final three months of last year, far worse than the US Government had initially estimated.
Gross domestic product (GDP) fell at an annual rate of 6.2 per cent between October and December, above initial estimates of a 3.8 per cent decline during the fourth quarter of 2008.
In response, London's FTSE 100 index plunged further below the 4,000 level today, losing 127.35 points to 3,788.29 and America's Dow Jones industrial average fell 132.45 points to 7,049.63.
Investors in Germany and France also took fright - Frankfurt's Dax fell 4.1 per cent while French-listed stocks dropped 3.3 per cent to 2,654.52.
With President Obama's fiscal stimulus packages not expected to become effective until the second quarter of this year, Wall Street is expecting growth numbers for the current quarter of 2009 to be as bad as the last three months of 2008.
According to the new GDP numbers, the US economy actually contracted by 6.2 per cent - the worst showing in 27 years - at the end of last year because American exports plunged by more than expected and the US consumer stopped spending.
The worse than expected numbers show that the US economy is struggling to cope on two fronts - on one side, foreign markets have applied the brakes to buying US goods as their own economies plunge deeper into recession.
On the other front, Americans have become so anxious that they may also join the soaring numbers of unemployed that they have stopped spending on all but essential items such as food and petrol. >>> Grainne Gilmore | Friday, February 27, 2009
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